Student Loans : News, Updates and Blog Posts

The Wall Street Journal had a great article yesterday explaining some of the problems that graduate business schools have been facing in regards to decreased applicant and attendance volume over the past few semesters.

The author, Diana Middleton, writes:

Many full-time programs have seen a drop in applications international students, partly due to increased competition from schools abroad and because of increased difficulty securing visas and student loans.

It’s no secret that student loans are more difficult to obtain for graduate students in the past few years due to the credit crunch and slow economic recovery. However, there are more lenders and programs than ever to assist post-undergraduates with their advanced degree programs. (more…)

Ah yes, the ever nagging question of dependency status on the FAFSA. We know it well. Recently one of our financial aid forum users, Ssully, posted this question in regards to that exact topic: (more…)

On Tuesday, one of our financial aid forum users, Scarab790, asked this question:

I am starting grad school next week and my cost of attendance is $74,347 with a grant of $10,000. With no personal funds to reduce the cost, I have the option of taking a federal grad stafford loan, grad plus loan or a private loan. which of the loans is better to take? the fed loans or private? If a federal one, I will have to take both grad stafford and grad plus loans to make up my bill.I want to reduce my debt burden by all means possible. What do you advise?

This is actually a very common question and the answer is by no means etched in stone.

Let’s outline some of the major details of each type of loan:

Graduate PLUS Loan

• Fixed interest rate of 7.9% APR
• Several generous repayment plans
• 0.25% APR reduction for enrolling in auto-debit payments

Private Student Loan

• Variable interest rate, based on an index such as LIBOR
• Fewer repayment plans
• A wide variety of benefits depending on the lender, ability to use a co-signer

The easy response to the question is the federal loans are a better deal. However, this may not be the case with all students. One important thing to consider is the credit aspect; if you have a good score, excellent history or creditworthy co-signer, you can potentially get a very low APR private student loan.

In addition, there are numerous benefits offered by private lenders. Some select examples are APR reductions, graduation rewards and co-signer release. Compare private student loans »

Thus, the decision rests more on the basis of credit. If yours is low, non-existent or troubled, always pick the federal option because it is far more lenient and there are repayment plans that take your income into account.

If your credit is good, or you have a good co-signer, pick a private student loan. I have seen rates as low as 2.80% APR with private loans; startlingly less than a Graduate PLUS’s 7.9% APR. Just keep in mind that private student loans have variable interest rates, so they can fluctuate during repayment.

If you’re looking to attend graduate school, you will want to be sure to exhaust all avenues to help you cover the cost. While your credit is likely improved enough where you can take out an alternative student loan or Grad PLUS loan, you still have rent, car payments and other bills to consider. So if you already have a full-time job, be sure to contact your employer about tuition reimbursement.

Tuition reimbursement benefits are offered by many employers, and essentially means the employer will cover some, if not all, of the cost of attending graduate school. The mentality for employers is that by attending grad school, the employer will gain a more advanced skill set in a particular field, and thus, be more valuable to the company.

Tuition reimbursement varies from company to company. Some offer to pay for one class at a time; others give you a set amount to use toward tuition each year. Contact your human resources department for more information.

If you recently earned a graduate degree and are having difficulty either finding a job, or making ends meet with an existing job, you may have the option to defer, or temporarily suspend, your graduate school loans. It is important to remember that deferment of your federal graduate loans is not a way to avoid paying the loans back altogether, but rather a way to avoid falling deeper into a financial abyss.

There are two most common types of deferment:

The first is Economic Hardship Deferment. You may qualify for this brand of deferment provided that:

• You are receiving payment under a federal or state public assistance program, such as Supplemental Security Income (SSI) or Food Stamps.
• You are serving as a Peace Corps volunteer.
• You are working full-time and your total monthly gross income from employment is less than the monthly minimum wage or 150% of your state’s poverty guideline.

The second type of deferment is loan forbearance. The primary difference between the two is that while in forbearance, interest will continue to accrue on the principal of your loan. That means your debt will continually increase while in deferment.

You are allotted 36 months of federal loan deferment entitlement regardless of which deferment you take advantage of and must reapply every 12 months.

Finding the time to get a graduate degree is not easy. Whether you are balancing a family, a full-time job, or both, some prospective grad students are forced to only take one or two classes per semester to accommodate their schedule.

Securing financial aid can be very difficult as well. If you are a less than half-time student, you are ineligible to receive federal financial aid.

But there are options.  You can visit our private student loan comparison tool to get an overview of lender criteria.

If you have a full-time job, check with your employer to see if there are any tuition reimbursement programs. Many companies will cover some or all of an employee’s tuition if they are involved in a program that would benefit their current career path.

Finally, you can consider an online degree. Online degrees are generally more flexible with course offerings. Visit Edvisors.com for additional information about this option and to find out which online school is best for you.

Super Street Fighter jokes aside, we are pleased to announce that PNC Bank has been added to our comprehensive lender comparison tool on PrivateStudentLoans.com.

As always, if you have questions, comments or concerns about any content on our websites, please leave a comment in our financial aid forum and we will work to resolve them asap!

Compare Private Student Loans »

Are you a graduate student looking for something beyond Stafford direct loans and scholarships for an advanced degree?  Two of your options are the Graduate PLUS and Graduate Private loans. Both tend to be overlooked but can go a long way toward helping you pay for grad school tuition and expenses.

Grad PLUS Loans

One of the benefits of a PLUS loan is the fixed interest rate, as well a set of helpful repayment options from the Department of Education’s Direct Loan program. For example, with a PLUS loan, if you are having difficulty making ends meet even with a full-time job, you may be eligible for income-based repayment which allows you to postpone repaying your loans. The Grad PLUS loan requires a credit check, but it is fairly relaxed. The yearly limit on a Graduate PLUS Loan is equal to your cost of attendance minus all other financial aid.

Graduate Private Student Loans

The best reason to apply for a private student loan is to cover a wide variety of expenses. If you need to cover tuition or pay rent, you can use a private loan. If you have extra books to buy or you need a new computer for school, you can use a private loan.

Graduate private loans, like PLUS loans, don’t necessarily require a co-signer to pass the credit check, though it is much stricter than a PLUS loan and you will want a stronger credit history in order to get a better interest rate, which will most likely be higher than that of a PLUS loan.

There are several rites of passage as you go through your twenties -  finding a full-time job,  perhaps starting a family, enduring the horrible day when you realize you’re closer to turning 30 than you are from graduating high school.

One such rite of passage is the decision whether or not to go to graduate school. What was once seen as an option for a select few fields (i.e. the law, medicine) has become almost a requirement in virtually any career path. If you are currently against the prospect of heading back to school, here are a few things that may change your mind.

Make yourself more marketable to employers: Think about how many fields these days require a four-year undergraduate degree. Going to graduate school sets yourself apart from the pack, and also provide you a more advanced skill set that tends to stick out in a pile of resumes.

Raise your salary: Not only does graduate school give you a more marketable skill set, but it can fatten your paycheck as well. The average employee with a Master’s or other upper-level degree earns $10-$15,000 per year more than someone in their field with a Bachelor’s, according to Salary.com.

Many ways to pay: A graduate degree does not come cheap, and if you are already paying undergrad loans back, not to mention other such life expenses, adding another can seem like an unnecessary burden.

But there are several options to facilitate paying for grad school. First, if you have undergraduate loans, you can file for an in-school deferment which will postpone all of your loans until after you graduate.

You may also be eligible for tuition breaks. Many companies, for example, offer tuition reimbursement programs to employees looking to advance their degree. Be sure to also check in with your undergraduate school to see if they offer discounts for former students. My alma mater, Northeastern University, for example, offers a 25% tuition reduction for former graduates.

Securing financial aid for graduate school is not terribly dissimilar from undergrad. You still fill out your FAFSA for subsidized and unsubsidized Stafford loans. You can also take out Grad PLUS loans which are based on credit, not need. Another popular credit-based option is a graduate private loan. One perk of borrowing a private loan for graduate school is that you may have built up a strong enough credit history not to require a cosigner.

Compare lenders and apply for a graduate private loan today.

The most predominant hang-ups for young professionals concerning going to graduate school are time and money. How much will graduate school cost? And how long will it take? As you learned from earning a Bachelor’s, time and money go hand in hand. The longer it takes to get a graduate degree, the more it’s going to cost in tuition.

How long it will take to complete a graduate program is contingent on how much time you are able to devote to classes. If you have a full-time job and are only able to take part-time classes at night, it will obviously take longer to get a degree than if you were going to class full-time.

Getting a Master’s degree generally takes between two to three years on a full-time course load. Other programs can take more or less.

For example, getting a law degree generally takes three years, provided you are on a full-time program. You may be able to get a part-time law degree in four years.  A law degree typically requires between 80-90 credits.  For business school, a full-time MBA program takes two years; part-time MBA programs usually take three to four years. Medical degrees generally take four years to earn.

Obviously this varies from school to school, and program to program. One of the perks of graduate school is that many programs are very flexible to fit your schedule, so the decision on how long you go to school is mostly up to you. If possible, try to go to graduate school at least half-time so you can be eligible to receive federal Stafford loans. Half-time student eligibility is determined by the school. For example, if a school claims 12 credits counts as full-time, then you must be taking at least six credits per semester to receive a Stafford loan.

If work and family make going to school half-time unlikely, a private student loan can help you cover graduate tuition costs. Compare your loan options today.